ReconAfrica Announces Upsize of Underwritten Offering to C$18 Million for the Advancement of Operational Activities on its Ngulu Block, Offshore Gabon, and Provides a Drilling Update on the Kavango West 1X Exploration Well

Core Viewpoint - ReconAfrica has announced an increase in its underwritten offering to C$18 million due to strong investor demand, aimed at advancing operational activities on its Ngulu Block offshore Gabon and providing a drilling update on the Kavango West 1X exploration well [1][2]. Offering Details - The offering consists of 30,000,000 Units priced at C$0.60 per Unit, resulting in gross proceeds of C$18 million [1]. - Each Unit includes one common share and one warrant, with the warrant allowing the purchase of one common share at C$0.72 for up to 24 months post-offering [3]. - The net proceeds will fund appraisal and exploration expenses related to the Ngulu Production Sharing Contract (PSC), including geological studies and the advancement of the initial development well at the Loba Complex [4]. Drilling Updates - The Kavango West 1X exploration well has reached a depth of approximately 2,300 meters, with plans to drill through an additional 1,500 meters of the Otavi reservoir zone, targeting a total depth of around 3,800 meters [5]. - Well results are expected in Q4 2025 [5]. Ngulu Block Overview - The Ngulu PSC covers 1,214 km² in shallow waters offshore Gabon, with ReconAfrica holding a 55% working interest and acting as the operator [7][17]. - The block has near-term oil production potential, particularly from the Loba field, which has a production potential of approximately 20,000 barrels per day [14][13]. - The Loba field was discovered in 1976 and has a gross oil column of 140 meters [14]. Strategic Rationale - The transaction positions ReconAfrica as an offshore West Africa operator, diversifying its portfolio with low-risk appraisal, development, and exploration assets [10][13]. - The company aims to leverage existing infrastructure within 10 kilometers of the Loba field to reduce development costs and enhance cash flow [10]. - The PSC agreement allows for a minimal work commitment over the initial four-year period, providing an attractive entry into a producing hydrocarbon province [9][10]. Exploration Potential - The Ngulu block contains 28 identified prospects, with sizes comparable to existing producing fields ranging from 38 million to 250 million barrels [16]. - Advanced seismic reprocessing will be initiated to identify additional prospects and develop a drilling inventory of lower-risk exploration targets [16][11]. Industry Context - Gabon is a significant oil producer in Africa, with current production exceeding 220,000 barrels per day and proven reserves of approximately 2 billion barrels [20]. - The government of Gabon is committed to creating a favorable regulatory environment to attract investment in the oil and gas sector [19].